Holding Over After Withdrawal and Rent Acceptance Creates a Fresh Month-to-Month Tenancy: Subsequent Eviction Suit Not Barred by Order XXIII and Late Commercial-Court Objections

1. Introduction

The dispute concerns eviction and recovery of possession of commercial premises let by the respondent society (landlord/plaintiff) to Budge Budge Company Limited (tenant/defendant) under an agreement dated 29-10-1973 at a monthly rent of ₹11,025/- (with additional municipal components). The litigation history is long: the landlord first pursued eviction under the West Bengal Premises Tenancy Act, 1956 by serving a notice under Section 13(6) and filing Ejectment Suit No. 419 of 1992, then withdrew that suit, accepted rent thereafter, and subsequently issued a fresh termination notice under Section 106 of the Transfer of Property Act, 1882 leading to the present suit (CS No. 317 of 2003).

The appellate challenge primarily raised: (i) whether acceptance of rent after earlier termination/withdrawal created a fresh tenancy by holding over; (ii) whether the second eviction suit was barred by Order XXIII Rule 1 CPC or by multiplicity/limitation; (iii) whether acceptance/deposit of rent post-notice constituted waiver under Section 113 TPA; and (iv) whether, given the Commercial Courts Act, 2015, the decree suffered from lack of subject-matter jurisdiction.

2. Summary of the Judgment

The Division Bench affirmed the eviction decree. It held that after the earlier 1992 suit was withdrawn and rent was accepted, the tenant’s continued possession operated as “holding over” under Section 116 TPA, creating a fresh month-to-month tenancy. That fresh tenancy was validly terminated by the subsequent notice dated 05-07-2003 under Section 106 TPA, furnishing a new and distinct cause of action. Consequently, the second suit was not barred by Order XXIII Rule 1 CPC.

On waiver, the Court agreed that mere acceptance of rent—particularly where payments were made under court orders and “without prejudice”—does not by itself prove intention to treat the lease as subsisting under Section 113 TPA, especially absent a foundational plea in the written statement.

On the Commercial Courts Act objection, the Court rejected a late-stage jurisdictional challenge: the suit was instituted in 2003, long before the 2015 Act; proceedings had substantially advanced; and no resulting prejudice/failure of justice was demonstrated.

3. Analysis

3.1 Precedents Cited

• The Kerala State Electricity Board Vs. T.P. Kunhaliumma, (1976) 4 Supreme Court Cases 634
  

  Cited by the appellant to press a limitation argument. The High Court found the reliance misplaced: the cause of action for the 2003 suit arose from termination by the 05-07-2003 notice and the ensuing failure to deliver possession; the Court stated the Limitation Act, 1963 had “no role to play” on the facts as urged, and treated the limitation submission as inapposite.

• SNEH LATA GOEL v. PUSHPLATA and Others, (2019) 3 Supreme Court Cases 594
  

  Applied to underline the discipline of jurisdictional objections: objections to territorial jurisdiction must be taken at the earliest opportunity and must show “consequent failure of justice.” The High Court analogically used this reasoning to repel the appellant’s belated jurisdictional attack, emphasising both delay and absence of demonstrated prejudice.

• Starlift Services Private Limited Vs. Syama Prasad Mookerjee Port, Kolkata, MANU/WB/0764/2026
  

  Relied on by the appellant to argue jurisdictional invalidity, but distinguished: that decision arose under Section 34 of the Arbitration and Conciliation Act, whereas the present matter is a civil eviction suit. The Court held the arbitration-context ratio did not govern this appeal, especially in view of Sneh Lata Goel.

• Kiran Singh and Others Vs. Chaman Paswan and Others, (1954) 1 Supreme Court Cases 710
  

  Invoked on questions of valuation/jurisdiction and prejudice. The High Court used it to reinforce that appellate interference on valuation/jurisdictional grounds requires prejudice, and that a party cannot complain of prejudice flowing from its own choices. Here, the valuation/court-fee controversy had earlier been decided by a co-ordinate bench order dated 19-07-2005 directing additional court fees, which was complied with and not appealed.

• Haryana Staff Selection Commission Vs. Priyanka and Others, (2022) 18 Supreme Court Cases 122
  

  Cited by the respondents for the principle that “act of the court should not be to the prejudice of anyone.” The High Court referenced this as a general fairness maxim while addressing late procedural/jurisdictional objections.

• Mumtaz Yarud Dowla Wakf Vs. Badam Balkrishna Hotel Pvt. Ltd. And Other, 2023 SCC OnLine SC 1378
  

  Used to highlight that civil court powers are plenary and the onus lies on the party asserting lack of jurisdiction; also, the judgment’s distinction between institution and adjudication was noted—particularly, that jurisdictional shifts by later statutes typically address the proper forum to adjudicate and do not unsettle decrees where jurisdiction was not raised in time.

• Ananta Chandrakanta Bhonsule Vs. Trivikram Atmaram Korjuenkar, MANU/SC/0368/2023
  

  Relied upon to hold that an ouster of civil court jurisdiction (express or implied) cannot operate retrospectively to annul a decree validly passed. This supported rejection of the appellant’s Commercial Courts Act argument.

• Dipankar Ghosh and Another Vs. CESC Limited, 2025 SCC OnLine Cal 9363
  

  Cited on retrospectivity of judgments; the Court held it had “no manner of application” to the present facts, where the key issue was the timing and waiver/prejudice in raising jurisdictional objections.

• T.N. Godavearman Thirumulpad Vs. Union of India, 2025 SCC OnLine SC 2325
  

  Cited by respondents; the Court found it not applicable to the fact matrix at hand.

• Laxmi Polyfab Pvt. Ltd. Vs. Eden Realty Ventures Pvt. Ltd. And Another, 2021 SCC OnLine Cal 1457
  

  Cited to emphasize the Commercial Courts Act’s object: speedier resolution of high-value commercial disputes, not technical disruption of advanced proceedings. The Court used this purposive understanding to resist a late-stage transfer/invalidity narrative.

• Calcutta Credit Corporation Ltd. & Anr. Vs. Happy Homes (P) Ltd., AIR 1968 SC 471
  

  Central to waiver analysis: Section 113 TPA requires an act showing intention to treat the lease as subsisting, plus consent (express or implied) from the other side. The High Court endorsed the Trial Court’s reliance on this authority to hold that acceptance of rent alone is insufficient to establish waiver.

• C. Albert Morris Vs. K. Chandrasekaran & Ors., (2006) 1 SCC 228
  

  Reinforced the proposition that mere acceptance of rent after lease determination does not create a tenancy or confer a right to remain in possession absent other indicia of assent/intention. This supported rejection of the tenant’s “waiver/renewal” story based on later payments.

3.2 Legal Reasoning

(A) Fresh tenancy by holding over after withdrawal and rent acceptance (Section 116 TPA)

The Court’s decisive move is to treat the post-withdrawal acceptance of rent (April–August 2003 at the old rate) as evidencing the landlord’s assent to continued possession after an earlier determination. This triggers Section 116 TPA, renewing the lease “from month to month” (given the nature/purpose as treated by the Court) unless an agreement to the contrary is shown.

(B) Distinct cause of action; Order XXIII Rule 1(4) CPC not a bar

Order XXIII Rule 1(4) bars a fresh suit on the same cause of action where an earlier suit is withdrawn without liberty. The Court accepted the Trial Judge’s formulation: once a new tenancy arose after withdrawal, termination of that new tenancy generated a fresh cause of action. Therefore, even if the 1992 suit’s withdrawal lacked liberty, the 2003 suit was not barred.

The appellant’s “two suits pending for some time” point (owing to the setting aside of the withdrawal order in C.O. No. 542 of 2004 and later disposal in 2006) did not defeat maintainability because the Court treated the later suit as resting on a different juridical foundation (post-withdrawal holding over and a fresh Section 106 notice), not a re-litigation of the original 1992 cause.

(C) Waiver of notice to quit (Section 113 TPA): intention + pleading + evidence

The appellant argued that acceptance/demand of rent (including later payments/deposits and the 10-11-2010 letter) waived the 05-07-2003 notice. The Court approved the Trial Judge’s approach:

• Mere acceptance of rent is insufficient to prove waiver; intention to treat the lease as subsisting must be shown (Calcutta Credit Corporation Ltd. & Anr. Vs. Happy Homes (P) Ltd.; C. Albert Morris Vs. K. Chandrasekaran & Ors.).
• Payments made under court orders and expressly “without prejudice” are readily characterised as compensation/use-and-occupation equivalents, not as revival of tenancy.
• Waiver is a mixed question of law and fact; foundational facts and the intention element should be pleaded. The Court noted the absence of a specific plea of waiver under Section 113 in the written statement, and found the evidence insufficient to infer waiver.

(D) Termination validity under Section 111(h) TPA read with Section 106 TPA

Having found a month-to-month tenancy by holding over, the Court treated it as terminable by a Section 106 notice and upheld the Trial Court’s conclusion that the lease stood determined under Section 111(h) TPA (determination by notice to quit).

(E) Commercial Courts Act, 2015: non-retrospective disruption; late objection; prejudice

The appellant’s contention that the decree was void for lack of subject-matter jurisdiction (commercial dispute requiring a Commercial Division) was rejected on a combination of grounds:

• Timing: the suit was instituted in 2003, well before the 2015 Act; it substantially progressed before 2015, and before SOP implementation in 2021; decree was delivered in 2024.
• No demonstrated failure of justice/prejudice: the appellant did not show how the forum caused injustice.
• No retrospective nullification: relying on Ananta Chandrakanta Bhonsule Vs. Trivikram Atmaram Korjuenkar and the broader approach noted in Mumtaz Yarud Dowla Wakf Vs. Badam Balkrishna Hotel Pvt. Ltd. And Other, the Court refused to treat the later forum regime as retrospectively annulling a long-pending civil action and decree, especially where objections were not timely pursued.

3.3 Impact

• Holding over in “litigation-heavy” tenancies: The decision underscores that withdrawal of an eviction suit followed by acceptance of rent can reset the tenancy relationship, creating a new month-to-month tenancy under Section 116 TPA—thereby enabling a later Section 106 notice and a new eviction suit without attracting Order XXIII Rule 1(4) CPC.
• Waiver arguments face a higher bar: Tenants seeking to rely on “rent acceptance after notice” must plead and prove the landlord’s intention to treat the lease as subsisting. Payments made pursuant to court directions and “without prejudice” will ordinarily not support waiver.
• Commercial Courts Act objections must be timely and prejudice-based: The ruling signals a judicial reluctance to allow late-stage forum challenges (especially in pre-2015 suits) to derail decrees absent clear statutory compulsion and demonstrated injustice.

4. Complex Concepts Simplified

• “Holding over” (Section 116 TPA): If a tenant stays after the lease ends and the landlord accepts rent or otherwise agrees to continued possession, a new tenancy arises by operation of law—typically month-to-month for many urban premises.
• “Waiver of notice to quit” (Section 113 TPA): A termination notice can be waived, but only if the landlord does something that clearly shows an intention to treat the lease as continuing, and the tenant agrees (expressly or by conduct). Accepting money is not automatically waiver; the surrounding circumstances matter.
• “Mesne profits”: Compensation payable for wrongful occupation after the right to occupy ends—often assessed with reference to market rate/occupation charges rather than the old contractual rent.
• Order XXIII Rule 1(4) CPC: If a plaintiff withdraws a suit without permission to file again, a fresh suit on the same cause of action is barred. If the cause of action is genuinely different (e.g., a later tenancy and a later termination), the bar may not apply.
• Commercial Courts Act, 2015 (forum issue): The Act creates specialised fora for specified commercial disputes. But a late objection after years of litigation typically requires strong reasons and a showing of prejudice; courts are cautious about retrospective nullification of advanced proceedings.

5. Conclusion

This judgment consolidates a practical and litigation-sensitive rule in landlord–tenant disputes: when an earlier eviction proceeding is withdrawn and the landlord thereafter accepts rent, the tenant’s continued possession may mature into a fresh tenancy by holding over under Section 116 TPA. Termination of that fresh tenancy by a Section 106 notice yields a new cause of action, insulating the subsequent eviction suit from the withdrawal bar in Order XXIII Rule 1(4) CPC.

Equally, the decision tightens the evidentiary and pleading discipline around waiver: rent acceptance—especially under court orders and without prejudice—does not, without more, revive a terminated tenancy. Finally, the Court’s treatment of the Commercial Courts Act objection reflects a strong preference for finality and fairness: late forum challenges, in long-pending pre-2015 suits, will not lightly unsettle decrees absent timely objection and demonstrable injustice.